Ford to invest $1 billion in Avon Lake, Cleveland Plants
CLEVELAND, Ohio — Ford Motor Co. has committed to investing $1 billion in two Greater Cleveland manufacturing plants.
It is to invest $900 million in a new product line and other improvements at the Ohio Assembly Plant in Avon Lake. A further $125 million will also be spent on continuing upgrades at Ford’s Cleveland Engine Plant in Brook Park as part of a contract tentative agreement with the United Auto Workers.
The auto giant’s plans are set to add 1,500 jobs at the Ford Ohio Assembly Plant, according to Avon Lake Mayor Greg Zilka.
“We are pleased that Ford, the State of Ohio, Team NEO, the UAW and the City of Avon Lake have built such a positive working relationship,” Zilka said in a prepared statement.
Under the new UAW agreement, the plant will add another vehicle to its manufacturing roster by 2023, which the new workers will help build.
Right now, the assembly plant makes F-650/750 Medium Duty Trucks, F-350/450/550 Super Duty Chassis Cabs, E-Series Cutaways and stripped chassis.
About 1,740 employees work at the plant, and roughly 1,600 are hourly employees.
Ford also plans to add $150 million in upgrades to its Cleveland Engine Plant in Brook Park.
“One thing people don’t realize is that we are going to benefit from the trades union people building the facility well before it is open,” Zilka said. “That is a shot in the arm for our City of Avon Lake, as well. Our understanding is that they will either add on to the very large facility they have now or possibly it could be a stand-alone building on the campus. We don’t have that information yet.”
But one thing is known: the city will economically benefit from the expansion. He said that while the plant includes parts of Sheffield Lake and Sheffield Village, “the vast majority” of it is in Avon Lake. The mayor said the school district, which receives 80% of local real estate taxes, would benefit from the investment. Zilka said the earliest these taxes would be collected is 2024, but that it is too early to tell the amount.
The 1,500 jobs also will generate income tax for Avon Lake. Economic Development Director Ted Esborn said it’s not currently known what that amount will be. However, he said the current 1,700 jobs at the plant contribute much to the city’s coffers. Esborn said the city annually collects $7.5 to $8.5 million in income tax from businesses.
“Ford accounts for about 25% of all income tax that Avon Lake receives from businesses, and that’s a roster of over 300 businesses including other large manufacturing employers like PolyOne, Lubrizol, and Thogus,” Esborn wrote in an email.
Impact on real estate
Unlike other areas of public and private investment, the economic benefits to infrastructure are clear. But not only does investment infrastructure lead to job creation and GDP growth; it also acts as a catalyst, having significant knock-on impact to the surrounding real-estate.
City transportation projects, in particular, tend to signal where the next property hot-spot will be. Historically this has been road or rail projects. “The Opportunity Corridor”, which began in 2015, is a boulevard in Cleveland, Ohio, partially open to traffic and partially under construction. The $306 million city investment will connect Interstate 77 and Interstate 490 to the University Circle neighbourhood (the fastest-growing job centre in the region).
With these combined investments from Ford and the city of Cleveland (just two recent examples) the short and long term results are sure to be an increase in Economic growth within the city.
Economic growth is one of the major factors in Real Estate capital appreciation. Demand for housing is dependent upon income. With higher economic growth and rising incomes, people will be able to spend more on houses, this will increase demand and push up prices.
What factors help Ford in this large financial investment decision?
The Cleveland area may see its low cost of living finally become a magnet for college graduating techies from its University Circle, alongside other members of what some people call the “creative class.”
A new report revealed regions that have or can attract young workers in fields such as engineering, software development and the arts will have the best opportunities to grow their economies.
The Cleveland metropolitan area is among a group of large metros with the fastest growth in creative-class workers between 2005 and 2018.
Analysis shows Cleveland in fifth place with a 17.3% growth in creative-class workers.
Ford understands Cleveland has the correct ingredients in place to attract the workers needed for their expansion. With affordable quality homes and an improving road network and public transport infrastructure, Cleveland’s advantages are now less of a “secret” to young professionals seeking an affordable place to start a career.
The announcement of Ford’s $1 Billion dollar investment will be very positive news for people that have already invested in Cleveland Real Estate.
For those looking to get involved while the prices and ROI are still one of the best in the whole of the USA, call or email Global Investments today.